The goods appear in the stock by themselves
My client was the CEO of a wholesale company, let’s call it XYZ, that sold consumables to manufacturing businesses. He faced a strategic challenge — all his competitors offered similar goods and services to the customers.
- The quality of goods available in the market was identical.
- All the businesses proposed fast delivery services and flexible order management systems (OMS) to the customers.
XYZ was one of the many. And, since the CEO was ambitious, he wanted to change it.
He and his team spent weeks talking to customers. They tried to find their needs or requirements that other market players didn’t fully satisfy.
They offered the clients even faster delivery service and more sophisticated OMS than the competition. Unfortunately, clients didn’t fall in love with the idea, but XYZ’s profits declined — these initiatives were quite expensive.
It looked like they ran out of ideas.
During one of the strategic workshops, I suggested we dive deeper. The team had been trying to do the same that others did but do it better. What if we looked at customer needs from a different perspective?
Meet Bob. Bob works as a purchasing manager for one of XYZ’s clients. His job is to monitor the inventory levels, place orders with suppliers on time, and perform the purchasing process.
Superiors praise Bob when the stock levels are normal. They punish Bob when the consumables are out of stock or inventory levels are too high.
Imagine Bob living in a fairy tale where a magic wand may fulfill his wishes. What would Bob want from the wand? He would like goods to appear in the stock on their own — on time and in the necessary quantity.
TRIZ
Genrikh Altshuller, a Soviet engineer, inventor, and writer, was born in 1926 in Tashkent. Tashkent is the capital of present-day Uzbekistan, which was a part of the Soviet Union at the time.
Altshuller became famous for the creation of the Theory of Inventive Problem Solving, aka TRIZ (the acronym comes from the Russian title of the theory). He loved to say that the perfect tool is the one when there is no tool, but the job is done. When there is no tool, the solution is simple and not expensive.
XYZ tried to solve its strategic problem by offering Bob (and many other purchasing managers it worked with) software that would help him monitor the inventory levels and make better purchasing decisions.
But Bob didn’t like the idea much. This new software should be integrated with the ERP system of the company Bob worked for. Bob’s colleagues from the IT department frowned upon it. So, XYZ’s team decided to streamline the solution and offered Bob an inventory management program.
From that moment on, Bob no longer needed to do the work, he had just to supervise. XYZ took charge of everything. It began to monitor inventory levels, place orders, and deliver consumables on time autonomously. The goods didn’t belong to customers until they purchased them from the stock, though the warehouses were located on the customers’ premises.
It was a win-win situation. Bob was happy — and so were his colleagues from other companies. XYZ gained new loyal customers and left competitors behind.
How to find such a solution?
To reframe a strategic task, you need to answer several questions. And the first two of them are the following:
- Who is the customer? This question may look too obvious, but asking it often makes sense. Who was XYZ’s core customer? Bob? Bob’s boss? The CEO of the company Bob works for?
- What problem does the customer want to solve? What is the task they need to carry out?
The second question deserves special attention.
On the one hand, Bob’s working routine is to purchase consumables. But is it the only task Bob needs to perform? Is it his only concern?
At this point, we need to add an emotional dimension to Bob’s work.
- Bob wants to get praised and avoid punishment.
- Bob, as we all do, wants to save some energy and time on performing the process.
And now, we need to find what Genrikh Altshuller called the In-Depth Contradiction (IDC) and the Perfect Solution.
In Bob’s case, the In-Depth Contradiction may look like “Bob wants to get job done well to get praised and avoid punishment, but he wants to save time and energy.”
A Perfect Solution may be as follows: “We do this work instead of Bob, so he doesn’t waste his precious energy, and the job is done.”
I would add that Bob was not the only one who benefited from XYZ’s solution. The company Bob worked for also saved some costs on stock, property, and personnel. But Bob was the happiest character in our story.
